85S10746 KLA-D
	By: Capriglione	H.B. No. 209

	A BILL TO BE ENTITLED
	AN ACT
	relating to the determination of the sufficient balance and
	management and investment of the economic stabilization fund.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  The heading to Subchapter H, Chapter 316,
	Government Code, is amended to read as follows:
	SUBCHAPTER H. ALLOCATIONS OF CERTAIN CONSTITUTIONAL TRANSFERS OF
	MONEY [PRESERVATION OF SUFFICIENT BALANCE IN ECONOMIC
	STABILIZATION FUND]
	SECTION 2.  Sections 316.093(a), (b), and (f), Government
	Code, are amended to read as follows:
	(a)  Before the comptroller makes transfers for a state
	fiscal year in accordance with Section 49-g(c), Article III, Texas
	Constitution, the comptroller shall determine whether the sum of
	the balance of the fund on the preceding August 31, any projected
	transfer to the fund under Section 49-g(b) of that article, and any
	projected transfer to the fund under Section 49-g(c) of that
	article in accordance with the allocations for the transfer as
	provided by Section 49-g(c-1) of that article is less than the
	sufficient balance determined as provided by [adopted under]
	Section 404.074 [316.092].
	(b)  If the sum described by Subsection (a) is less than the
	sufficient balance determined as provided by [adopted under]
	Section 404.074 [316.092], the comptroller shall reduce the
	allocation to the state highway fund provided by Section 49-g(c),
	Article III, Texas Constitution, and increase the allocation to the
	economic stabilization fund, in an equal amount, until the
	sufficient balance determined as provided by [adopted under]
	Section 404.074 [316.092] is achieved.
	(f)  Subsections (a) and[,] (b)[, and (c)] and this
	subsection expire December 31, 2024.
	SECTION 3.  The heading to Section 404.0241, Government
	Code, is amended to read as follows:
	Sec. 404.0241.  COMPUTATION [INVESTMENT] OF [CERTAIN]
	ECONOMIC STABILIZATION FUND BALANCE [BALANCES].
	SECTION 4.  Subchapter C, Chapter 404, Government Code, is
	amended by adding Sections 404.0242 and 404.0243 to read as
	follows:
	Sec. 404.0242.  MANAGEMENT AND INVESTMENT OF ECONOMIC
	STABILIZATION FUND ACCOUNTS. (a) To manage economic stabilization
	fund investments, the comptroller shall establish the following
	accounts in the economic stabilization fund:
	(1)  the Texas stabilization account; and
	(2)  the Texas legacy account.
	(b)  In managing the assets of an account established under
	this section, the comptroller, through procedures and subject to
	restrictions the comptroller establishes for each account and in
	amounts the comptroller considers appropriate for each account, may
	acquire, exchange, sell, supervise, manage, or retain any kind of
	investment that a prudent investor exercising reasonable care,
	skill, and caution would acquire, exchange, sell, supervise,
	manage, or retain in light of the purposes, terms, distribution
	requirements, and other circumstances then prevailing for the
	account, taking into consideration the investment of all the assets
	of the account rather than a single investment.
	(c)  Section 404.024 does not apply to the investment of the
	assets of an account established under this section.
	Sec. 404.0243.  INVESTMENT OBJECTIVES AND PURPOSES OF
	ECONOMIC STABILIZATION FUND ACCOUNTS. (a) The investment
	objectives and purposes of the Texas stabilization account in the
	economic stabilization fund are to preserve:
	(1)  the account's principal;
	(2)  the purchasing power of the account's principal;
	and
	(3)  the liquidity of the account.
	(b)  The investment objectives and purposes of the Texas
	legacy account in the economic stabilization fund are to generate
	earnings on the account's principal to:
	(1)  maintain the purchasing power of that principal
	and if possible, increase that purchasing power; and
	(2)  provide for predictable and stable annual
	earnings.
	SECTION 5.  Subchapter E, Chapter 404, Government Code, is
	amended by adding Section 404.074 to read as follows:
	Sec. 404.074.  SUFFICIENT BALANCE OF ECONOMIC STABILIZATION
	FUND. (a) For the purpose of making the transfers of money
	required by Section 49-g, Article III, Texas Constitution, the
	amount of the sufficient balance of the economic stabilization fund
	is equal to seven percent of the certified general revenue-related
	appropriations for the state fiscal biennium during which the
	transfers are to be made.
	(b)  Except as provided by Subsection (c), the comptroller
	shall allocate and, at the time and in the manner that minimizes
	losses and penalties, adjust the allocation of the economic
	stabilization fund between the Texas stabilization account and the
	Texas legacy account to:
	(1)  maintain a balance in the Texas stabilization
	account equal to the sufficient balance of the economic
	stabilization fund; and
	(2)  allocate the remainder of the economic
	stabilization fund balance to the Texas legacy account.
	(c)  If the legislature appropriates money from the Texas
	stabilization account and, as a result of that appropriation, the
	account balance is less than the sufficient balance of the economic
	stabilization fund, the comptroller may not adjust the allocation
	of the economic stabilization fund balance to allocate an amount to
	the Texas stabilization account to achieve a balance in that
	account equal to the sufficient balance.
	SECTION 6.  The following provisions of the Government Code
	are repealed:
	(1)  Section 316.091;
	(2)  Section 316.092;
	(3)  Section 316.093(c); and
	(4)  Sections 404.0241(a), (b), and (d).
	SECTION 7.  This Act takes effect December 1, 2017.